Thanks to Michigan’s Supreme Court, waitstaff, bartenders and other workers who receive tips will have their wages slowly increased, beginning in 2025. Wage increases will continue over five years. Michigan’s current minimum wage is $10.33 an hour, which will jump to $10.65 in 2025, and reach $12 by February 2028. 

In a 4-3 decision Thursday, the court decided that amended versions of Michigan’s Wage Act and Earned Sick Time Act were unconstitutional. 

One Fair Wage, one of the ruling’s biggest supporters, released a statement after the court made their decision. 

“This is a great day for the more than 494,000 workers in Michigan who are getting a raise. We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top.” said Saru Jayaraman, the President of One Fair Wage. 

Michigan Attorney General Dana Nessel also shared her opinion on the ruling, calling it an “affirmation of the power of direct democracy.” 

However, not everyone is excited about the court’s choice. Brian Calley, the CEO and President of the Small Business Association of Michigan spoke out against the decision. 

“Michigan enjoys a diverse economic climate because of small businesses, allowing every community to thrive in its own unique way. Impeding the entrepreneurial climate of our great state is bad for workers, consumers, and small businesses.” 

Michigan House Republican Leader Rep. Matt Hall says the wage changes will lead to more job cuts. 

“Restaurants and other small businesses will have to raise their prices, tipped workers will take home less pay, and some people will lose their jobs,” Hall said. 

The court also received criticism from the Michigan Restaurant & Lodging Association. 

“As our recent industry operations survey illustrated, 40% of full-service restaurants in Michigan are already unprofitable, meaning this decision is likely to force more than one in five of them to close permanently, eliminating up to 60,000 jobs along the way,” President & CEO Justin Winslow said. 

The Wage Act ballot initiative was passed by voters back in 2018. It was supposed to raise Michigan’s minimum wage, along with removing the tip credit. Tip credits let employees that receive tips be paid less than minimum wage. Employers were allowed to pay workers as little as $4 an hour. 

The proposal’s original language was heavily amended, and then signed by then-governor Rick Snyder. 

The court’s Aug. 1 decision means the original version of the act will now be implemented. Tipped workers will be paid minimum wage, along with one and a half hours of paid time off for each hour of overtime, rather than be given overtime pay. 

The court also ruled on the Earned Sick Time Act. This will require the majority of employers in Michigan to offer a minimum of 72 hours of paid sick leave annually to employees. All employees, even those who work part-time or seasonally, will receive an hour of paid medical leave for every 30 hours they work.